Lendlease appeal loss over Figtree Hill puts it in firing line for $100m earnings hit
Lendlease could be slugged for hefty costs after losing an appeal over development rights to a parcel of land in Sydney’s west in a decade-long dispute.
Embattled property developer Lendlease is facing the prospect of writing off $100m worth of costs on a soured Sydney land purchase, after losing an appeal against a key court decision that went against it earlier this year.
The company had appealed a ruling the NSW Supreme Court handed down in April over a dispute about the development rights to a key land parcel next to the Figtree Hill Estate in Sydney’s western suburbs.
The court loss is part of a long-running dispute between Lendlease and a series of landowners, including a branch of the famed Macarthur-Onslow family, deriving from an agreement they made a decade ago over land that was to be developed adjacent to the estate.
The parcels in the western Sydney suburb of Campbelltown are now farmland and were once part of a larger property the family had sold off, some of which Lendlease has already developed.
Lendlease argued it held rights to key parcels that it had proposed buying for about $120m but its plans have been thwarted.
JPMorgan analysts Richard Jones and Adam West said as the appeal had gone against Lendlease it may need to book a $100m impairment.
“The value at risk to Lendlease, should it be unable to secure the land parcels through the appeal process or a revised agreement, is currently estimated to be up to $100m (post-tax), representing write-off of capitalised costs incurred over the past 10 years in relation to planning, rezoning and site-wide infrastructure spend,” they said.
The decision could hit Lendlease’s capacity to bolster future potential cash inflows, just when chief executive Tony Lombardo is looking to get the company growing again locally after retreating from the bulk of its international operations.
The analysts still see some hope for Lendlease despite what they called a weak fiscal 2026 earnings outlook, writing it was attractive on a risk-adjusted basis as most business units were improving.
They expect that earnings will lift as Lendlease exits its $4.6bn of invested capital from its very low returning Capital Release Unit division, which includes assets locally and overseas that are in the process of being sold off.
Lendlease has been active locally and has struck deals to buy luxury residential sites in Sydney, and it is the development partner for the Brisbane 2032 athletes’ village, planned for the Brisbane Showgrounds.
The company is now considering its position and had earlier noted the rights associated with the land parcels were carried in the Capital Release Unit, and did not impact its earnings guidance.
After a tough period defending its APPF property management empire, the company struck a series of deals showing its ability to win backers for its projects, with a Japanese company supporting a project in Melbourne and one of its funds selling a building in Sydney.
The listed property group is still under pressure in funds and last month said it would undertake an orderly sale of the remaining assets in its flagship $2.9bn retail property fund after its investors called for a swath of their capital to be returned.
There has also been rumblings about whether its industrial vehicle could come back into play, although this may be unlikely as it has built up a large stake that could be used to thwart rivals.
The company must also decide whether its APPF Commercial fund will exercise rights to take full control of the O’Connell Precinct in Sydney.
Lendlease shares, which are down more than 17 per cent for the year, closed flat at $5.16 on Friday, giving the group a market value of $3.6bn.
More Coverage
Originally published as Lendlease appeal loss over Figtree Hill puts it in firing line for $100m earnings hit
What to know about the ATO’s ‘harsh’ new hit on holiday homes
